Speaking at a House of Commons Energy select committee he said Ofgem had look again at its findings after energy companies told the regulator that it may have underestimated the scale of problems facing the UK.

Bills have already increased by much more than inflation, climbing from below £600 five years ago, and are now – especially for pensioners – many households' biggest monthly cost.

Ofgem in October warned that rising demand, an increasing reliance on imports from uncertain sources, a lack of storage facilities and the fact Britain had too many ageing coal-fired power stations, would force up bills by between 14 per cent and 60 per cent above inlfation by 2020.

In the worst case scenario, this would inmply bills would increase from the current average of £1,300 for each household to £1,950.

Mr Buchanan said he not have gone far enough in warning of potential price rises and energy shortages. “The big message that we’re getting from four of the big six energy companies, academics and specialists is that we’re too optimistic,” he said.

Companies believe Ofgem may not have looked closely enough at the effects of oil price shocks, volatile gas prices and planning delays to building new stations.

It may also have overestimated reductions in gas and electricity demand, which the Government believes will happen due to energy efficiency measures.

Mr Buchanan also warned that an ever greater proportion of the bill would be makde up of green taxes. About 9 per cent of the average family energy bill goes to funding energy companies' obligation to cut greenhouse gas emissions.

He said that up to 30 per cent of consumers' bills could be made up of green subsidies.

He said: "It is absolutely incumbent on us to represent clearly to consumers what it is costing them, so they fully understand what the cost is to make Britain a nicer place to live in for our children and grandchildren."